Loblaw, Shoppers, GE Announce Earnings for the Quarter. Corporate Profits are Healthy in Canada and the U.S.

General Electric (NYSE: GE)

Revenues and profits soared for the world's largest manufacturer of jet engines and turbines for power plants. Second quarter profit came in at $3.69 billion, up from $3.03 billion last year. On a per share basis this is 35 cents versus 28 cents. This is a healthy gain for a company once written off by many during the recent recession.

Revenues fell slightly to about $36 billion as it sold the majority of its stake in NBC Universal to Comcast Corp. Considering, however, that analyst estimates for GE had been $35 billion, the slight decline is good news. The major developments in the company during the quarter were in the area of its energy business, which made acquisitions totalling over $11 billion. In the future, the upside potential in this business for GE could be substantial.

For more on GE check out Reuters News Service.

Loblaw Companies Ltd. (TSE: L)

Canadian grocery heavyweight Loblaw Companies Ltd. announced stronger second quarter results today. Loblaw's earnings came in at $197 million, or 67 cents on a per share basis. Last year, Loblaw's earned $181 million or 64 cents per share. Revenues also rose by a small margin to $7.28 billion.

However, all is not good news at Loblaw. Already competing against Wal-Mart, Sobeys, Metro, and Costco, the company will soon by vying with Target, which will surely take a bite out of both its grocery business and new Joe Fresh line.

Employee wages, however, have been under intense pressure at the retailer and the UFCW has been unable to effectively keep wages much higher than they are at competitors. Cheaper labour costs will undoubtedly give Loblaw a fighting edge, even though its employee morale is said to be in the basement at most stores.

Shoppers Drug Mart (TSE: SC)

Canada's largest drug store chain announced higher quarterly results today. Even without a permanent CEO, the company edged out many of its rivals and reported a second quarter profit of $148 million, or 68 cents per share. Last year, the company earned $146 million or 67 cents per share. Since analysts were looking for a per share profit of $67 cents for Shoppers, they beat estimates by a penny, and, overall, performed reasonably well.

Performing particularly well were its "front-of-store" sales, which include the items most commonly thought of at Shoppers next to prescriptions... cosmetics etc. Non-prescription sales at Shoppers were up 3.8 percent, which more than made up for a decline in prescriptions of 1 percent.

Many Shoppers' shareholders, including myself, have been worried as of late about the decline in prescriptions due to generic drug pricing in Ontario, and the loss of the company's CEO, but as the numbers indicate, profits are rising, albeit slightly, and good money is being made. Hopefully a new CEO is found soon,  but until then, just stay the course with this Canadian retail gem.

Happy Investing : )

Wal-Mart Invading Urban Canada. New "Wal-Mart Urban 90 Stores" to Attract Even More Buyers.

Wal-Mart (NYSE: WMT) recently announced that it is going to begin opening urban stores in Canada. The first concept store will be opened on an old Zellers property that it will be acquiring from Target. The format of the store will be named "Urban 90," and it will be located in the east-end of Toronto.

The new Wal-Mart's are intended to fill a gap that Wal-Mart experiences in Canada currently. Since the company is usually located on very large suburban lots, they have been unable to reach many dense urban buyers. They hope that the new stores will allow them to expand further into a Canadian marketplace that they have largely saturated.

The new Urban 90 format, being located in dense urban environments, is going to hit the traditional retailers and grocers the hardest. Many Giant Tiger, Loblaws (TSE: L), Metro (TSE: MRU.A), and Sobeys banners are located in urban environments that currently are free from Wal-Mart's tentacles. Soon, however, the ubiquitous yellow smiley face will shower Canada's urbanites as well. Canadian retail investors beware!

Happy Investing, and for more info:

http://www.thestar.com/business/companies/walmart/article/1014669--wal-mart-to-open-urban-store-buys-zellers-sites

Target Announces Canadian Store Locations. Kingston's Zellers to Close in 2013 & HBC to use Money to Revamp The Bay.

Target Corp. (NYSE: TGT) recently announced the list of its first 105 Canadian stores when it formally takes over for Zellers in 2013. Kingston's Cataraqui Town Centre Zellers will be involved in the first wave of store closures when it converts to the Target banner, as will 44 other Zellers locations in Ontario. The second wave of store conversions will be announced in September. 


In the next few days, Target will also pay HBC owner Richard Baker half of the $1.82 Billion price that is due for the 220 leases he sold to the American retailer. Money that Mr. Baker has stated will partially be used to revamp some of the corporation's struggling The Bay stores, and expand the successful Home Outfitters franchise into the United States.   


Many analysts have now begun speculating which American chain will be the next to make its Canadian foray. J.C. Penny (NYSE: JCP), Kohl's, (NYSE: KSS), and Macy's (NYSE: M) have all been mentioned, but it is doubtful any of them will make as large a splash as Target intends. Zellers was long viewed, and widely known, as a takeover candidate, but other Canadian chains are less obvious. 


As many investors know, the Canadian retail landscape is largely dominated by foreign enterprises and multinationals, but there are still a few companies, like Loblaw (TSE: L), Metro (TSE: MRU.A), etc. who own large amounts of valuable real-estate that could be sold to a hungry international retailing firm like Tesco from the UK. To be sure, Intelligent Investors must be mindful of the underlying value that some traditional Canadian firm's like Loblaw and Metro hold under their stores.


Happy Investing : )

Loblaw Earnings Rise $30 Million, but Supply Chain Investments Hurt Results.

According to Reuters News Agency, Loblaw Companies Ltd (TSE: L), owner of Loblaws, No Frills, Zehrs, PC Bank, and other ubiquitous brands, posted a higher quarterly profit on Wednesday. Canada's leading grocer, however, said investments in information technology and supply chain infrastructure weighed on its operating income for the year.


First-quarter earnings rose to C$162 million, or 58 basic Canadian cents a share, from C$132 million, or 48 basic Canadian cents a share, a year ago, but revenue fell 0.6 percent to C$6.87 billion. The quarter, essentially, was not bad, but the company seriously needs to get its infrastructure and supply problems under control as it has been weighing on earnings and disappointing shareholders for years. Rivals, such as Metro (TSE: MRU.A) and Wal-Mart (NYSE: WMT) have not been experiencing the same disruptions in business as of late, and Loblaws' shareholders are suffering as a result. If you are a Loblaws shareholder, the company is still generating reasonable enough profits to maintain your shares, but be careful about more impending supply-chain and management problems going forward.

New No-Fee Chequing Account: ING Direct THRiVE Chequing a Great Choice.

ING Bank of Holland is expanding its presence in Canadian retail banking. Taking a leaf from CIBC and Loblaws' PC Financial, ING has begun offering no-fee chequing accounts in addition to its line of savings, investment, and mortgage products. 

Known as ING Direct in Canada, the brand has become a well-known name in many Canadian households through its "save your money" slogan and orange colour scheme. The chequing accounts are a direct attempt to take market share away from Canada's major banks and occupy a larger share of the average Canadians' wallets. 

ING will undoubtedly meet with much initial success as they already have over 1.8 million customers in Canada, of which many have accounts at other banks. In the first year, ING hopes to attract about 100,000 customers, but they are probably low-balling that number in anticipation of a pleasant year-end announcement that they shattered their expectations. 

Some of the features of the new accounts include an initial batch of free cheques, free debit, free ATM transactions at Credit Unions and HSBC Bank, and, my personal favourite, FREE overdraft protection as long as you pay back the amount within 30 days! No more NSF charges if you forget about a certain bill that is coming due or a cheque that you wrote awhile back. 

To be sure, ING is making deeper and deeper inroads into the Canadian market. Their StreetWise series of mutual funds are simple and reasonable, their savings rates are respectable, and now their chequing account is quite superior to anything offered by Canada's five traditional banking enterprises. Of course, PC Financial offers largely the same thing, but it is nice to see even more choice for Canadians in the banking sector. 

All in all, an excellent choice for the intelligent investor. Why pay fees when you don't have to. Take the money you save on your banking fees and buy shares in your old bank with it.

For information on ING's new product, go to:

http://www.ingdirect.ca/en/chequing/index.html

Happy Investing : )